IP & Brexit - what has changed for design rights?

04 August 2016

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It is important to know that currently there is no change to EU intellectual property rights or laws. In particular, the scope, effectiveness and enforceability of unitary EU-wide designs remains the same, both within the UK and the other 27 member states. This will continue to be the case until such time as the UK actually leaves the EU, which will occur at the end of a period of negotiation likely to take at least two years.

Will D Young & Co be able to continue representing clients for EU design matters and before the EU Intellectual Property Office (EUIPO)?

Yes. Nothing will change with respect to rights of representation for at least the next two years and we have already taken steps to ensure that we will continue to be able to represent clients before the EUIPO (formerly OHIM) following the UK's exit from the EU in due course. These include both the recent opening of our Munich office and ensuring that our attorneys and solicitors are suitably qualified to act.

What will happen to existing Community design rights?

Existing registered Community designs (RCDs) will no longer be effective in the UK after the UK's actual exit.

Similarly, it is anticipated that transitional provisions will be introduced so as to provide for national UK registered designs to co-exist alongside residual RCDs.

After the UK's exit from the EU, Community unregistered design rights will cease to apply in the UK. Whilst there is already a separate UK national unregistered design right, this differs from the Community right in a number of respects. In particular, the UK right protects the shape and configuration of a product, whereas a Community unregistered design right covers the appearance of a product, including features such as colours, texture and ornamentation. The UK Government will therefore need to consider whether to legislate so that the national right is extended to include the additional features currently covered by the Community right, thereby closing the potential gap in protection.

What action should be taken in relation to existing registrations and new applications?

Until the UK actually leaves the EU, existing RCDs will remain fully effective and enforceable.

In terms of filing new designs during this transitional period, we recommend filing both an RCD application along with a separate UK national application. Doing this will provide greater certainty in relation to long-term protection in the UK. In addition, we advise continuing to maintain any UK national registrations which may already exist.

Will IP contracts such as EU-wide licences be affected?

We recommend conducting a review of any IP-related agreements, such as licensing arrangements, which involve RCDs or where the territory is specified as the EU. Unless the agreement expressly deals with the prospect of countries leaving the EU (which is unlikely), the issue of whether a particular agreement will still cover the UK post-Brexit will be open to interpretation.

In general, unless there is anything in the contract to contradict it, it is likely that such agreements (where English law is the governing law of the contract) would be construed as still including the UK, on the basis that the parties intended to include the UK at the time of entering the contract.

It is important to note, however, that the position for any given contract will always depend on the circumstances of the particular agreement in question, hence the importance of reviewing such contracts, taking specific advice and potentially entering variation agreements if required.

To what extent will the principle of 'exhaustion of rights' continue to apply to designs?

At present, once goods have been put into circulation in the European Economic Area (EEA) by or with the consent of the rights holder, the relevant design rights are said to be 'exhausted' and the rights holder cannot prevent further free movement of the goods within the single market (unless there are legitimate reasons such as a change in condition of the goods).

The extent to which exhaustion of rights will continue to apply to the UK will largely depend on whether or not the UK remains a member of the EEA (which currently includes all member states of the EU, as well as Iceland, Liechtenstein and Norway). However, if the UK leaves the EEA or if the UK Government takes a restrictive view on international exhaustion, it is possible that rights holders may be able to restrict imports coming into the UK from the EU, and vice versa.

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